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Residents from a number of communities, particularly in rural areas, will soon be required to pay a 25 per cent increase per litre (1 gallon) on water supplied to them by the Rapid Response programme of the National Water Commission (NWC).
Effective March 1, the rates for 4.5 litres (1 gallon) of trucked water will increase by $1.25 for every 4.5 litres and irrigation water from 50 cents to $1 for every 4.5 litres.
Minister of Water and Housing, Donald Buchanan, who made the announcement today said in an effort to recover costs, the price of the 2925 litre (650 gallon) black tank would move from the current $5,500 to $6,500. He however, pointed out that the Ministry did not make a profit from black tank sales, noting that the price merely reflected the cost of the tank itself and transportation.
Speaking at a press briefing at the Ministry on St. Lucia Avenue in Kingston, Mr. Buchanan said that as part of the continued restructuring of the operations of the NWC several changes in the Commission’s Rapid Response programme would be introduced. This follows the recommendations of the KPMG Peat Marwick Audit.
He said under the direction of a new management team which has been reviewing the operations of the programme, the deployment of trucks were being realigned to deal with demand on a geographic basis, which would also result in a number of job cuts at that level. To date some 199 employees have been separated. Minister Buchanan said this process would be continued incrementally and the targeted structure should be achieved by December 2004.
Minister Buchanan also told journalists that a more favourable method of obtaining fuel was being finalized.
He disclosed that the system was also being revamped to achieve tighter control and a minimization of fraudulent activities, stating that disciplinary action was now being taken against two employees involved in the unauthorized selling of water.
Minister Buchanan however pointed out that even with the cost cutting measures there was still a challenge to maintain the current level of services at the existing rate and charges, noting that since the inception of the programme five years ago the rates had not changed.
He confirmed that the amount allocated from the budget for the 2004/2005 financial years for the programme was some $6 million less than the support in the current budget. Continuing, he noted that the subsidy provided since the programme commenced was $150 million in 2000/2001; $100 million in 2001/2002; $75 million in 2002/2003 and $53 million in the current financial year.
Referring to the NWC’s requested tariff increase from the Office of Utilities Regulations (OUR) in September of last year, Minister Buchanan said the increase that became effective in January would be reflected on customers’ bills this February.
He noted that although consumers did not welcome tariff increases, the duties were necessary to put the NWC in a position to fund critical rehabilitation work to provide better service.
In September of last year the NWC applied to the Office of Utilities Regulations requesting a comprehensive review of its water and sewerage rates and proposed an across the board 42 per cent real increase in all of its existing water tariff.
However, the OUR after reviewing the NWC’s operations gave an increase of 26.36 per cent along with performance targets. The OUR had said that the effective rates charged by NWC (i.e. the base rate adjusted by the Price Adjustment Mechanism, PAM) would be increased by 26.36 per cent effective January 1, 2004 with sewage rates remaining at 100 per cent of water charges.